From procuring raw materials to shipping the final product, almost all steps of the manufacturing and production process of eco-friendly products cost more than traditional products. For instance, while the overall shampoo category saw declines of 3.4% over a year long period ending April 2018, natural shampoos, which own 11.2% of the value share, are steadily growing at 2.2%. Consumers have some understanding of what makes a product sustainable but it is not necessarily a consideration when making a purchase Although the majority of consumers recognise what makes a product sustainable i.e. And investors should support companies in making the investments needed for the pivot. In Taiwan, for example, where 88% of surveyed consumers said that it is extremely or very important that companies implement programs to improve the environment, there is evidence of a growing trend in natural in personal care. On Earth Day 2020, the organisation Climate Neutral an independent non-profit organisation working to decrease global carbon emissions confirmed 103 brands had completed its certification process in 2020 and 50 other brands were still in the process. The firm has over 1,400 employees in 41 offices worldwide. Says Gstalder: While marketing good deeds is encouraged and expected by consumers, authenticity and credibility are essential. While companies are increasingly using environmental claims to appeal to consumers, they also attract greater scrutiny. The relative importance of sustainability during the purchase process will continue to increase. Nielsen Good Environmental Choice Australia is a similar organisation. A 2015 global online survey by Nielsen reflected Brabeck-Letmathe's comments, with research showing that 66 percent of the 30,000-plus respondents said they would be willing to pay extra for . Youths' greater sensitivity towards CSR issues is on display in another report, this one limited to US respondents. Defending and preserving our planet is not only the right thing to do, its good business. Create a free account and access your personalized content collection with our latest publications and analyses. To use individual functions (e.g., mark statistics as favourites, set To ensure consistent and accurate representation of the U.S. general population 18 years of age and older, data was weighted by the following variables: sex, age, geographic region, race/ethnicity, and education. When looking at both Baby Boomers and Generation X, 24 percent across each have significantly changed their behavior towards being more sustainable -- this figure climbs to 32 percent for Millennials. 66% of survey respondents are willing to pay more for sustainable goods, up from 55% in 2014, and 50% in 2013 Sales of consumer goods from brands with a demonstrated commitment to sustainability have grown more than 4% globally, while those without grew less than 1%. michele@greenprintcorp.com Millennials are the most willing to pay extra for sustainable offeringsalmost three-out-of-four respondents (73%), up from approximately half in 2014. Globally, sustainability is rated as an important purchase criterion for 60 percent of consumers. Topping the list of sustainability factors that influence purchasing for nearly two-of-three (62%) consumers globally: brand trust. 75% of Millennials are willing to pay more for an environmentally sustainable product, compared to 63% of Gen Z, 64% of Gen X, and 57% of Boomers. For the US, 22 percent of consumers indicate major changes to the behavior, but that number jumps to 55 percent when including those who say theyve at least made some modest changes. Consumers are trying to be responsible citizens of the world, and they expect the same from corporations. A paid subscription is required for full access. In 2014, 65% of total sales of consumer goods measured globally were generated by brands whose marketing conveyed commitment to social and/or environmental value. statistic alerts) please log in with your personal account. Nielsen's 2015 Global Corporate Sustainability Report has revealed that brands showing a commitment to sustainable practices are receiving support from consumers, who are willing to pay more for . From there, it becomes more specific and fragmented. Deloitte. They accounted for 16.6% of the market in 2018, up from 14.3% in 2013, and delivered nearly $114 billion in sales. Our eBook "What ESG means to you and your consumers in 2022" is designed to help Checking labels before buying. I dream of a world in which clothing is more expensive across the board, but there are no more sweatshops anywhere, and no more slash-and-burn. Millennials and Gen Z are becoming a force to be reckoned with as they continue to represent a larger share of the consumer demographic. Those that had no such commitment grew less than 1%. This is the result of a representative survey that we commissioned from INNOFACT. Nudge theory is used to understand how people think, make decisions and behave. : (617) 231-4551 You need at least a Starter Account to use this feature. A majority of people have doubts when companies say they are environmentally friendly, with 53% of Americans never or only sometimes believing such claims. Recent Study Reveals More Than a Third of Global Consumers Are Willing to Pay More for Sustainability as Demand Grows for Environmentally-Friendly Alternatives While attitudes vary across. The survey also showed that consumers in Southeast Asia are the most willing . If you have a question youd like an expert to answer, please send it to climate.change@stuff.co.nz. For example, the climatop label certifies products that generate significantly less greenhouse gas than comparable products. This conventional wisdom has been used by many brands as justification for not making their products more sustainable. This shows that sustainability has been on consumers' minds for quite. When it comes to purchase behavior, its become abundantly clear that consumers care. Inherently skeptical, Millennials will punish companies on social media not deemed to be fully transparent as well as those that pay lip service to CSR and causes important to them. The study also found a large degree of mistrust about companies environmental claims. Its about exploring your trustworthy methods of communication, then selecting one that aligns with your objectives.. 77% of Americans are concerned about the environmental impact of products they buy. While 66 percent of global consumers are willing to pay. Nearly three . What is the World Economic Forum doing about the circular economy? While attitudes vary across generations, countries, and industries, 85% of consumers have become greener in their purchasing in recent years. Brands that establish a reputation for social responsibility and environmental stewardship among todays youngest consumers have an opportunity to not only grow market share but build loyalty among the power-spending Millennials of tomorrow, too, says Farraj. We are interested in estimating the proportion of all consumers willing to pay more. It also found that 73% of global Millennials are willing to pay extra for sustainable offerings up from 50% in 2014. Directly accessible data for 170 industries from 50 countries and over 1 million facts: Get quick analyses with our professional research service. This indicates an opportunity for consumer-goods brands that have already built a high level of trust with consumers to evaluate where best to introduce sustainable products into the market to drive growth, says Carol Gstalder, senior vice president, Reputation & Public Relations Solutions, Nielsen. In burgeoning sustainability markets, however, natural and organic are paving the way for more detailed and specific claims. We help our clients achieve growth and profit targets by applying practical, evidence-based strategies. We used clothing brand Reformation as a case study of sorts and spoke with experts in consumer behavior and the fashion industry to better understand the sustainability movement, why consumers love it, and how more brands can do their part. Again, younger generations lead the way as higher shares of Generation Z (39 percent) and Millennials (42 percent) are willing to pay for sustainability compared to Gen. X (31 percent) and Baby Boomers (26 percent). The best of the best: the portal for top lists & rankings: Strategy and business building for the data-driven economy: Industry-specific and extensively researched technical data (partially from exclusive partnerships). 76% of Americans would switch their preferred packaged goods brand if they were offsetting carbon emissions. And its no longer just wealthy suburbanites in major markets willing to open their wallets for sustainable offerings. Companies have used this conventional wisdom as justification for not making their products more sustainable. To ensure the most secure and best overall experience on our website we recommend the latest versions of, Internet Explorer is no longer supported. Colloquially, use of the word green is applied broadly to almost everything related to benefiting the environment, from production and transportation to architecture and even fashion. As expectations around sustainability climb, companies will face significant pressure to prove their sustainability credentials and continue to make it a central part of their value proposition., One third of consumers are willing to pay a premium for sustainable products, and companies should prepare for sustainability to become the expectation and not the exception in the future. 2015 Nielsen Global Corporate Sustainability Report, 2015 Cone Communications Millennial CSR Study. Comparing sectors, 78% of respondents said food/groceries are doing well in terms of demonstrating their commitment to environmentally friendliness. For years, researchers have examined climate-oriented consumption to see if it wins peoples support. Professor of Marketing and Consumer Behaviour, Queensland University of Technology. This is especially true for Millennials. In, Deloitte. Get in touch with us now. The Global Sustainability Study 2021 survey was conducted in July 2021 by Simon-Kucher & Partners, fielding through panel data provided by Dynata, an independent market research agency. Commitment to either social value or the consumers community are also important (each influencing 43% and 41% of respondents, respectively). Or to remain unmoved by those facing increasingly poor living conditions across the globe. Our analysis did not include the term natural (which is ubiquitous but means nothing) or marketing claims related to social causes or charities. Reports, such as Nielsen Insights , suggest the majority (73 percent) of people would change their consumption habits to reduce their impact on the environment, and almost half . Accessed March 02, 2023. https://www.statista.com/statistics/1367681/china-consumers-willingness-to-pay-more-for-sustainable-goods/, Deloitte. Toilet tissue, facial tissue, milk, yogurt, coffee, salty snacks, and bottled juices were among those with the highest share in their category (more than 18%), while laundry care, floor cleaner, and chocolate candy had less than a 5% share. Businesses must adapt to the times as consumers are voting with their wallets and Millennials, in particular, are demanding that companies put their money where their mouth is. Consumers from 60 countries were surveyed for this report. Get full access to all features within our Business Solutions. Products and services that are offered from socially responsible companies may be able to charge more, according to a report by Nielsen. Yes, meat will cost more and won't as widely available, but farm animalsshould all have real lives and humane deaths (and stop emitting so much methane into the atmosphere). And as social media channels continue to burgeon, the voice of younger generations will only increase the demand for sustainability. As the first generation to grow up with climate change as a defining issue, Gen Z is deeply . Among millennials,. 43% of consumers want brands to be more aggressive about showing sustainable products on-site to further personalize their shopping experience. They are willing to rethink their buying habits to incorporate environmental and social product benefits into their buying decisions. Millennials gave an even more impressive showing, with 73 percent indicating a similar preference." 75% of millennials are willing to pay extra for sustainable products.3Coffee cups, palm oil, and single-use plastics are some recent products to face public discussion, which leaves businesses rethinking both the sustainability of their materials and processes, and the environmental impact and recyclability of their products. On average, more than a one third (34 percent) of the population is willing to pay more for sustainable products or services, and those willing to pay more would accept a 25 percent premium on average. TV ads highlighting a companys commitment to positive social and/or environmental impact are influential in the path to purchase for 34% of global respondents. One-third of millennials often or exclusively use investment products that take ESG factors into account 19% of Gen Z, 16% of Gen X and 2% of baby boomers. Please do not hesitate to contact me. Among the 66% of global respondents willing to pay more, over 50% of them are influenced by key sustainability factors, such as a product being made from fresh, natural and/or organic ingredients (69%), a company being environmentally friendly (58%), and company being known for its commitment to social value (56%); sales and coupons didnt even make the top five. , Feb 8, 2023. We examined over 36 categories and more than 71,000 SKUs, which accounted for 40% of CPG dollar sales over the five-year period. Fifty percent of global consumers are willing to pay more for goods and services from companies that have implemented programs to give back to society, according to a new study from Nielsen. Numberingmore than 80 millionstrong, Millennials already account for an estimated$1 trillionof U.S. current consumer spending. And a report published in May by The Toy Association and Prodigyworks notes that millennial parents want the toys and. By 2021, consumers are expected to spend $150 billion on sustainable goods. That's why we're seeing a shift towards sustainable farming, farm-to-table, and organic botanical ingredients.". The first-ever edition of the company's Business of Sustainability Index found that nearly two-thirds (64%) of Americans are willing to pay more for sustainable products but most (74%). To ensure the most secure and best overall experience on our website we recommend the latest versions of, Internet Explorer is no longer supported. Consumers across regions, income levels, and categories are willing to pay more, if doing so ensures they remain loyal to their values. But nearly 60% are unwilling to pay more money for that eco-friendly product. For example, one study found Spanish consumers were willing to pay 22-37 per cent more for green products, but Japanese consumers were only willing to pay 8 per cent to 22 per cent more for . More demand would mean more production and lower unit price costs. In the past year alone, sales of consumer goods from brands with a demonstrated commitment to sustainability have grown more than 4% globally, while those without grew less than 1%. Commitment to social and environmental responsibility is surpassing some of the more traditional influences for many consumers. Original survey question: How much of a premium are you willing to pay for green consumption (i.e. To ensure the most secure and best overall experience on our website, we recommend the latest versions of. Consumers care about sustainabilityand back it up with their wallets, Five Ws and one H to mastering your category, Consumer Outlook 2023: The unsettled state of global consumers, Communication led by service advisors helps drive satisfaction with aftersales process in India, Do not sell or share my personal information. It is no secret that companies must be responsive to customer demands and expectations if they want to survive. Here, sales of natural shower gel sales skyrocketed upward 80% during the same period. Jun 27, 2014 The willingness to pay for sustainable products has increased universally since 2011. Personal values indeed. Use Ask Statista Research Service, among residents in China's tier-1 to tier-5 cities. Then you can access your favorite statistics via the star in the header. Products with a sustainability claim have continued to drive growth amid the pandemic, according to a new report from IRI and the NYU Stern Center for Sustainable Business. A survey by Nielsen found that 66% of consumers are willing to pay more for sustainable products. Consumers could note if they were willing to pay "a little" or "a lot" for each sustainability benefit. Sixty-six percent of consumers say they are willing to pay more for sustainable brandsup from 55% in 2014 and 50% in 2013. Statista. Consumers are also willing to pay more for chocolate products that are free-from 'undesirable' or artificial ingredients, a subset of products that makes up 15.2% of the overall chocolate category . "Despite the fact that Millennials are coming of age in one of the most difficult economic climates in the past 100 years, they continue to be most willing to pay extra for sustainable offerings--almost three-out-of-four respondents," says Nielsen. On a global scale, the percentage of consumers willing to pay a premium for. A clear majority of Europeans (74%) say food companies need to work to reduce the emissions from . GreenPrint Tech is close behind at 74%, while gas stations and convenience stores rank lower at 51% and 54% respectively. That across the board, consumers are willing to pay extra for one thing: sustainability. Mr Harrison says, however, that customers are becoming more canny. Wed suggest they follow the data. As soon as this statistic is updated, you will immediately be notified via e-mail. This sum will continue to grow exponentially as more Millennials reach peak buying power. Facebook: quarterly number of MAU (monthly active users) worldwide 2008-2022, Quarterly smartphone market share worldwide by vendor 2009-2022, Number of apps available in leading app stores Q3 2022, Research expert covering e-commerce and FMCG in Greater China, Profit from additional features with an Employee Account. Register in seconds and access exclusive features. Sustainability-marketed products are growing quickly in almost all CPG categories. Simon-Kucher & Partners is regarded as the worlds leading pricing advisor and thought leader. In 2015, Nielsen polled 30,000 consumers in 60 countries around the world. People want to feel that whatever they are buying aligns with their personal values. This desire for sustainable products among Gen Z is robust. In 2015, brands who showed a commitment to sustainability saw sales grow more than 4% globally. According to Nielsen, 66% of all consumers are willing to pay more for sustainable brands. Zach Harris She's vocal about the fact that it costs a lot more than shirts from a company like H&M specifically because she only uses sustainable goods and ethical practices when it comes to the workers. Construction/home (66 percent), Consumer goods (63 percent), Travel and tourism (62 percent) and Automotive (61 percent) range in between. Theres a noticeable break between generations, with 71% and 66% of Millennials and Gen Z willing to do so, compared to only 50% Gen X, 46% of Boomers and 39% Silent Generation. "Consumers are really seeking to purchase products that help them stay true to their values and what they consider matters most to them," said Parker. The Global Sustainability Study 2021*, conducted by global strategy and pricing consultancy Simon-Kucher & Partners, reveals significant global paradigm shifts in how consumers view sustainability and the associated generational differences in willingness to pay for sustainable products and services. To a certain degree, products that need to have a higher degree of efficacy (such as laundry care and sanitary napkins) were more likely to have a lower share of sustainability-marketed products, perhaps because consumers are concerned about performance trade-offs. Small brands in this space are also attracting the bigger players attention Unilever has purchased brands with loyal followings such as Seventh Generation, Sundial Brands, and Pukka Herbs. 2023 Nielsen Consumer LLC. Minds can be changed, laws can be changed, and companies can be changed. Consumer-goods brands that fail to take this into account will likely fall behind.. Given the evidence that consumer tastes are changing, an attitude of Why mess with a recipe that has worked well over the last 40 years? is the wrong one to take. According to market research firm Nielsen, just 22% of the world's consumers were willing to pay more for an eco-friendly product in 2011, despite the fact 83% thought it was important. zharris@prosek.com, Internet Explorer presents a security risk. World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use. So when it comes to purchasing, they are doing their homework. So it appears that some categories that are behind in sustainability-marketed product share are making up for lost time. Millennials already played a significant . Shoppers once selected grocery products based simply on price or brand, but now attributes such as climate-friendly or eco-friendly are part of the consideration. Retail data backs up the importance of these influencers. Please create an employee account to be able to mark statistics as favorites. Nielsen's 2014 Global Survey on Corporate Social Responsibility, released Tuesday, shows that 55 percent of global online consumers across 60 countries are willing to pay more for products and services from companies that are committed to positive social and environmental impact. To trust a company statement, 45% of Americans say they need a third-party validating source. You need a Statista Account for unlimited access. crivez un article et rejoignez une communaut de plus de 160 400 universitaires et chercheurs de 4 572 institutions. Simon-Kucher & Partners, Strategy & Marketing Consultants: Simon-Kucher & Partners is a global consulting firm specializing in TopLine Power. Question: Socially conscious Consumers In March 2015, a Nielsen global online survey "found that consumers are increasingly willing to pay more for socially responsible products. That some categories that are offered from socially responsible companies may be able to more... 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